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Funds, leading corporate houses and investors are finding a sweet spot in gaming technologies, both online and offline, as the sector poses to grow.
Players such as IIFL, Piramal and Edelweiss are among those who have taken a detour from their core investment portfolios and invested in gaming entities, signalling a growth in the category.
Recently, ace investor Rakesh Jhunjhunwala acquired stake in Nazara Technologies for approximately ₹180 crore.
Jhunjhunwala said: “I am always on the lookout for promising companies, which are leaders in high-growth verticals. Nazara is a leading company in the mobile games business. It has a consistent track record of delivering profits, cash flows, along with efficient use of capital and high ROE (Return on Equity). I see a growth potential in the company.”
IIFL Special Opportunities Fund last week acquired a minority stake in mobile-gaming company Nazara for ₹330 crore.
“The gaming industry is expected to see growth in India and emerging markets. Nazara is in a position to capture this growth, and has the potential to emerge a leading player in the mobile-gaming industry across emerging markets,” said Prashasta Seth, CEO, IIFL Asset Management.
IIFL Special Opportunities Fund (including series thereunder) has raised around $1 billion and invested in companies such as ICICI Lombard, NSE, Capacite, IEX and Reliance Nippon Life AMC. Earlier this year, Edelweiss Group invested ₹300 crore of mezzanine funds in Smaaash Entertainment, a sports-based entertainment company co-owned by film producer-director Shripal Morakhia and Sachin Tendulkar. Smaaash owns and operates sports-centric digital entertainment centres for cricket, football, go-karting, bowling and a host of virtual games in Mumbai, Hyderabad, Gurugram, Noida and Bengaluru.
Last year, Piramal Enterprises’ structured investment group (SIG) unit also invested ₹150 crore in Smaaash. Reliance Entertainment too has invested in 20 gaming start-ups.
Growing industryA KPMG report notes the online gaming industry in India is estimated at $360 million and is set to grow to $1 trillion by 2021. Virtual-reality gaming is also a fast-evolving vertical in the country.
Industry watchers note that growing digital advertising is forcing companies to look at gaming in a big way. Firms typically look to embed advertisements through games.
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